Repatriation of Cash Brings Syntel Loss

TROY — The Troy-based IT services company Syntel Inc. (Nasdaq: SYNT) reported a loss of $217.2 million or $2.58 a share, compared to net income of $77.7 million or 92 cents a share a year earlier, in the third quarter ended in Sept. 30.

Revenue fell 5 percent to $241.3 million from $253.6 million a year earlier.

For the nine months, the loss was $105.4 million or $1.25 a share, vs. net income of $178.3 million or $2.12 a share a year earlier. Revenue for the nine months was $726.6 million, up from $714 million.

The decline in profitability was the product of repatriation of cash held overseas, resulting in a one-time tax expense of $271 million. The company’s gross margin was 39.2 percent of sales vs. 42.4 percent a year earlier, and the company saw sharply higher selling, general and administrative expenses, at 12.2 percent of sales, up from 6 percent a year earlier.

“Market conditions were challenging during the third quarter as macroeconomic, business and regulatory uncertainty impacted customer spending in what is typically a seasonally strong period,” said Syntel CEO and President Nitin Rakesh. “Despite this, we continued to see some signs of stabilization in our insurance segment, including in the personal lines sub-industry.”

The company declared a one-time cash dividend of $15 a share to its shareholders during the quarter.

Based on current trends and an exchange rate assumption of 67 Indian rupees to the dollar, the Company currently expects 2016 revenue of $960 million to $970 million and loss per share in the range of 65 to 75 cents.

To listen to a conference call discussing the results, call (855) 859-2056 in the United States or (404) 537-3406 elsewhere and enter the pass code 97795475.